Crypto Update | Game of Tariffs: Kevin O'Leary on Crypto Amid 'All-Out Economic War' Between U.S. and China - Markets Outlook

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[00:00]
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[00:32]
Kevin O'Leary
Boats on the water coming from China, not coming into American ports because right now we're at 245% tariffs. That's a complete collapse of trade. And so it's got to get resolved. And it's a game of chicken between Xi and Trump. I think it'll get resolved in the next 60 days, but I'm guessing like everybody else and Powell's in the same boat. So it's classic that the executive, in this case Trump, would jawbone the Fed to drop rates. That's been going on since the beginning of time.
[01:05]
Host
Trump versus Chi, Bitcoin versus traditional markets and can either make a comeback.
[01:11]
Advertiser
Mr.
[01:11]
Host
Wonderful says that China and the US are playing a game of chicken. Bitcoin shows promise against traditional markets. And the narrative around layer twos is much more exciting than Eth these days. O'Leary Ventures chairman Kevin O'Leary, welcome back to Markets Daily.
[01:27]
Kevin O'Leary
Great to be here. Thank you.
[01:29]
Host
All right, let's talk about crypto markets off the top, and then I want to broaden the conversation out a bit. You know, if we look at bitcoin this morning, it is continuing to outperform traditional tech benchmarks. Talk to me about what this signals for you.
[01:42]
Kevin O'Leary
Well, this is a recent development. As you know, gold was outperforming bitcoin for quite a while during this incredibly volatile period in equity and debt markets. And now it seems to have latched on to be an alternative where it was really a risk on, risk off for quite a while. No different than just the indexes, the stock indexes. And so we've seen a decoupling which is very, very interesting. I think a lot of this has to do with where we're at in the regulatory cycle regarding all of crypto. As you well know, there is a bipartisan bill, the Stablecoin act, now called the Genius act under Hagerty, that looks like it has broad support towards digital payment systems. Basically a Stablecoin backed by the US Dollar, which is itself not a risk asset. However, it is a March forward in finally regulating crypto. And everybody's figured out we want this regulation because we would like to get to the point where we get through this first stablecoin act and then we get to the Market Infrastructure act, which finally determines which tokens and securities that are crypto are commodities and which are securities. Which would be a great outcome because once you have that designation, you know which regulator you're dealing with. And the tone has changed in Washington. Everybody's been talking about this. One of the reasons that we see more interest in bitcoin, period. But the real granddaddy opportunity is to make crypto and the underlying compliance platforms work within the financial services industry in the US and get the SEC and other regulators to stop litigating everybody. We're not there yet. We're pretty close. And that would, that would secure crypto as a, as a productivity platform, if you want to think of it that way. I think the usefulness of crypto is how it can reduce costs and add productivity to commerce, whether it's a stablecoin or whether it's a Bitcoin for risk on, risk off. So all of the tone is better and I think the market's reflecting that. But in the last week, seeing, you know, bitcoin specifically outperform the indexes, a lot of people are waking up and looking at that, saying, wow, this, this is a long time since this occurred.
[04:03]
Host
Break that down for me even further because I think a lot of people look at the maturity, I guess the path to maturity of bitcoin, they look at the path to regulation in the United States and they think, you know, with more regulation, with more mainstream adoption, that should mean that Bitcoin is more correlated with traditional markets. But you know, you just mentioned that decoupling, so break that down even further for me.
[04:27]
Kevin O'Leary
Well, I'm not sure I agree with that. And I'll tell you why. If you look at allocations traditionally in hedge, pension and sovereign wealth, it's not uncommon to find up to 5% weighting in an alternative asset like gold, which has outperformed everything in the last few months. It's been a, a harbor of security stabilization and you know, well past old highs after post inflation rate applied to it. So what percentage of those institutions? Because look, I appreciate that retail investors like to get involved and many of them use ETFs for Bitcoin, but the real money is managed in sovereign pension, you know, and high net worth family office around the world. And they have really not yet allocated 3 to 5% weighting in Bitcoin, some of them have, but it's nowhere near as mature as gold and gold has proven itself again. I have a 5% weighting in gold. Half of it's fully and I pay for storage. Half I round out in and out on the GLD. Or you can use other ETFs that are even less expensive, maybe not as liquid, but that's a classic institutional play. And this year it's worked. And it's worked very, very well. And I think people are waking up. When you say break it down. I now allocate bitcoin. I'm not 5%, but I'm 1 1/2 percent. So I'm on my way to a 3% weighting total crypto securities. If I look at everything I've got, including investments in the exchanges, which I consider the picks and shuffles, I'm at 19%, so I'm right up there. 20% weighting is not uncommon for sectoral weighting. And So I own WonderFi up in Canada, Coinbase in the US. You know, these are kind of Robin Hood. I consider that to be moving into a crypto that. I own that as well. These are the infrastructure plays. And the reason you would do that is if you really believe the, the Genius act, the stablecoin act is going to pass. You're going to create this FX market where you can actually transfer and digital payments at a fraction of the cost of Fed wire or traditional bank wire. I mean, this is a massive opportunity and I don't think the market's woken up to that yet. So I'm playing both the actual tokens and I'm playing the infrastructure through the exchanges.
[06:53]
Host
I want to get your perspective on ether. Right now it's down over 50% year to date, and we're talking about, you know, stablecoins and infrastructure play. And in that conversation, for a long time, ETH was a dominant player. Talk to me about how you're looking at ETH and Ethereum and how you expect to see price performance in the short term here.
[07:15]
Kevin O'Leary
Well, there's no question there's a move to the L2s, Solana onward and, and, you know, if you want to talk about efficiency, ETH is not the most efficient or the fastest. Now you've got players like Polygon on top of it, and there's a lot of, a lot going on. It is still the standard. But when I think about portfolio managers and we talk all the time, here's something really you got to think about. If you're just going into the crypto the first time. And you're just saying, okay, I want to allocate 1% in my $2 billion fund. That's not uncommon. They don't go to ETH. The only two assets they go to is USVC. I mean, or a stablecoin for liquidity for a bunch of reasons. And I use usdc. I have to full transparency. I'm a shareholder circle. So I like the fact that it's domestic and it's, it's auditable and I think it's going to survive at one to one audit and all that. But it's bitcoin. I mean, if you want exposure to crypto volatility, it's bitcoin. I mean it's sort of, it's not. ETH is not the go to place unless you start to understand the utility of it. And then you start to ask yourself, well, why am I only in eth? Why am I on L2s? Like why am I just doing eth? So I think for the billions that are waiting to come into crypto, it's not going to be eth, it's going to be Bitcoin itself. And you know, frankly there's a lot of people that say I don't need anything else. I just need, if I want exposure to crypto volatility, I'll just buy bitcoin. And they haven't been wrong.
[08:59]
Host
It's still though the second largest crypto by market cap. Do you think that it could be dethroned in the near future?
[09:08]
Kevin O'Leary
I think it'll be very hard to dethrone it, but I certainly don't. Only I own it too. But it's not the only one I own. I mean, I look at all the innovation coming and a lot of people don't understand innovation at the L2 level, but blockchain really matters. But speed of efficiency, I mean, my goodness, ETH is slow. I'm sorry, but it's slow. And I think a lot of people know that. And more transactions get piled on it. It doesn't get any better. I'm not there for a full weighting on eth. It's a one percenter for me. So I'm just one guy. I mean, look, I have no problem with it. It's just that's not going to be a 5% waiting ever error for me because there's so much innovation around it, on top of it, away from it. That's not a good sign. You don't see that kind of momentum on bitcoin. Bitcoin is the granddaddy anchor of any crypto portfolio. It just is. And it's not going to change. And it's the way it is. You know, sometimes you have to realize as these asset classes mature, there's always the granddaddy. Well, bitcoin's a granddaddy.
[10:14]
Host
I want to zoom out now. We have a lot to talk about. We have rates, we have China, we have tariffs, we have a lot going on. And I want to start with the potential for rate cuts. So as we know, the Fed hasn't cut rates yet while the ECB has cut, I think for the seventh time in a row. I recently had our markets editor from CoinDesk on this show and he said that someone is making an error and we're just going to have to wait and see who it is. What are your thoughts here?
[10:41]
Kevin O'Leary
Well, you know, here's the Powell's in a head squeezer as chair of the Fed right now because his mandate is 2% inflation and full employment. Doing well on the employment side, not so well on the inflation side. And so he's looking at one factor right now. He's saying, how long is this China dance going to go for? I mean, the rest of the whole thing with tariffs is going to get resolved with the eu. Britain, Switzerland, Thailand, Canada, Mexico. They're all coming to the table with either a reciprocal idea, maybe 10% or a zero tariff for free trade, one of those two alternatives. But China's a different beast. This is an all out economic war between the US And China. And it's not just tariffs. The question about IP theft has come up. You saw the list of Trump's grievances. IP theft was on there. And there's a big problem that China has been stealing IP for 20 years. Getting compliant with the World Trade Organization. They joined in 2000. They have never once been compliant, not a single week. There's thousands of complaints unresolved. No access to their court systems to litigate trade disputes, yet they have full access to the US Capital markets. Huge problem there because there's so many Chinese companies listed on Nasdaq and the New York Stock Exchange that are not compliant with gaap. They were given three years to get compliant. They didn't abide by any of it. They totally ignored it. And now there's a new sheriff in town just put in place. Paul Atkins is the new SEC head and he said, look, I'm going to enforce these laws, I'm going to delist these Chinese companies. They said they were going to get compliant. And they didn't. The former SEC Gensler didn't actually implement those laws or at least make Chinese companies be compliant with them. This new sheriff, if you want to call them that, is going to, and I think all of these things are, have, have to be resolved with China. And so if your pal, you're watching this passion play play out and saying, I'm not going to drop rates, I don't know what inflation is going to be like if the China thing actually happens. It could really, really be inflationary because the US market is the largest consumer market on earth, almost 40%. And all that stuff on boats, on the water coming from China, not coming into American ports, because right now we're at 245% tariffs. That's a complete collapse of trade. And so that's got to get resolved. And it's a game of chicken between Xi and Trump. I think it'll get resolved in the next 60 days. But I'm guessing like everybody else and Powell's in the same boat. So it's classic that the executive, in this case Trump, would jawbone the Fed to drop rates. That's been going on since the beginning of time. The Fed's independent. The market wants the Fed to be independent. Powell's done a pretty good job. He's not going to be browbeaten by anybody. No one's going to tell him when to lower rates. That's what his mandate is. He decides with the data that comes in. And I don't think Trump's going to fire him either. It's a bad sign to the bond market to fire the Fed and replace it with somebody that's compliant with your wishes. The market's not going to like that. That's not going to be good for the stability of long term treasury debt in the United States.
[13:59]
Host
Talk about that a little bit more. I know you say that Trump and Chi are playing a game of chicken or we're in a cat and mouse situation here. You said that you think it's going to go on for 60 days. What happens from here? What do you think? How does this play out?
[14:12]
Kevin O'Leary
Well, you got to find the off ramp where both sides save face. And so for Qi, he wants to keep all his factory workers employed, otherwise he has riots in the streets. And for Trump, he doesn't want to see hyperinflation in the US if these goods and services can't be purchased at low prices by American consumers. And so what he's trying to do is clean up and a lot of people including me, advocate for this. Because for 20 years, China has just not played by the rules. And the funny thing is, they don't give a damn. They don't care. And so, because there's no consequence, there's never been a consequence. And this administration comes along and, you know, I always say this about Trump. Half the market has Trump derangement syndrome. They just go crazy with the fact that he's back in White House. They can't stand it. And I say, look, I don't get caught up in the noise. I focus on the signal. I'm a policy guy. I just care about policy. And so I don't shill for Trump. I don't shill for any politician. I shill for policy. From policy perspective, I'd like to see this China issue resolved because I, too, have been ripped off. My IP has been ripped off in China. So many of the investments I've made in companies there get to $5 million in the trajectory of their new product or service in US Domestic markets, and then you find out the Chinese have ripped them off and selling it back into the US at a 40% disc discount because they don't have to recover any of the IP costs. They don't. They never invested in rmd, so they just rip the product off. And that's happened countless times. And for one, I'm tired of it, and I'd like to see it resolved. And I think many other countries as well that have had this happen to them would like to see it resolved as well. And so maybe for the cost of some volatility, VIX is up high. I get it. But if this thing could be resolved, and, you know, it has to be before the midterms, Trump can't go into the midterms with this kind of volatility or he'll lose, likely lose his majority mandate. So he doesn't want that to happen. And she can't afford two years of factory workers not making anything. So it's an interesting situation.
[16:10]
Host
So I guess, you know, with both parties at the table playing this game of cat and mouse, who. Who gives in? What's the negotiation tactic here? Because like you said, this has been going on for a very long time. I know you've proposed a 400% tariff to kind of get things to a standstill so this negotiation can happen. But. But where does the concession come from here?
[16:34]
Kevin O'Leary
Well, you know, the way you can assume right now between the two countries is a backdoor dialogue going on. And I would, and I think many people believe that to be the case. They're just trying to figure out who blinks first and you don't. In the case of xi, he's got to look strong to his people and so does Trump. So you don't know how it happens the way policy seems to happen with Trump. A lot of it happens on aircraft. On Sundays when he's flying back up on Air Force One to Washington, he comes out and starts talking to reporters. I've noticed that it's becoming a trend. He kind of goes to Mar a Lago for Thursday, Friday, Saturday, and flies up Sunday back to Washington and all of a sudden you get policy. It could be on one of those trips or it could be that she announces he's going to meet Trump in Riyadh or Geneva or something. You know, it's that kind of thing that's going to happen and I'm not too worried about it. The market doesn't seem to care that much about the European negotiations, Canada or Mexico anymore. Canadians have an election that's going to be resolved on the 28th and they'll be back at the bargaining table after that. So all of this stuff is going to get resolved. People don't like volatility. And then you've got all the pun, you know, the pundits saying, oh, recession chances 50%. They were calling for recession for four years and we haven't had it yet. So, you know, I'm just in a wait and see mode. And by the way, the market's correct all the time, 20% S&P down 14, 15% right now. So you've gone from sort of like a 23 P to 17 and not a bad place to put some money to work. I've been doing a little nibbling myself. You know, there's a lot of gnashing of teeth and angst, but corrections happen all the time and they happen for different reasons. You want to blame the tariffs, you want to blame job owning the Fed, blame whoever you want, but take advantage of a correction. It's always traditionally been a good place to enter and put some dollars to work in the indexes, and I've done that. And of course, having some bitcoin and gold has not been a bad outcome either. And so there's always something working somewhere in a market with volatility and you have to focus on that too.
[18:39]
Host
For someone who would maybe come up to you at an event or maybe even one of your kids, I'm sure that it wouldn't be their first time investing. But for first time investors out there who want to take advantage of the correction. Where would you tell them to look?
[18:54]
Kevin O'Leary
Well, I have a very simple rule that's worked for me for decades. Never more than 5% in any one stock or bond. Never more than 20% in any one sector. So we have 11 sectors. Technology, energy, you know, that kind of thing in the, in the US economy. So I make sure that my sectoral weightings remain below 20% and any position, including alternatives like bitcoin and like gold, I max out at 5%. And that's really worked for me. So you have this, you know, I remember I bought Tesla before it split and the thing just kept becoming 6, 8, 9% percent of the portfolios and I kept trimming it back down to 5% and eventually my cost base was zero. Now I own Tesla with a zero cost base and it's volatile, but that's the kind of thing you have to do in maintaining diversification in the portfolio. But I definitely think owning some bitcoin, and for me, I love USDC because the yield on that this morning I think is 3.822, which is better than a savings account in a bank. So I have a bunch of USDC sitting on exchanges getting yield. There's so many different ways to play it, but you do have to manage it through diversification. That's the key. And I consider crypto will be the 12th sector of the economy within five years because of the, of the productivity it has for digital payment systems and storage of wealth. So, you know, I've been maintaining my kind of cryptos. I mentioned earlier the 19% weighting, including the exchanges. So, you know, owning Robinhood, owning Coinbase, owning Wonderfi, these are the big North American exchanges where you, no matter what crypto is doing up or down, the exchange is making money because it's the infrastructure, volatility is good for an exchange. So I own all three of us.
[20:40]
Host
I mean, you mentioned a bunch of crypto equities there. What are your thoughts on MicroStrategy?
[20:45]
Kevin O'Leary
I don't own MicroStrategy. I think, you know, he's a great strategist, there's no question about it. But why don't I just only own bitcoin outright, which is what I do? I don't need to lever it. I don't buy the etf. I never understood why anybody would buy bitcoin in an ETF and pay fees. That's insane. I'm not telling people what to do, but I would never do that. If I want Vol on crypto. Just buy bitcoin. You don't have to have a funky chicken strategy over it or debt on it or leverage or prefs or bonds. Just own bitcoin. That's how I, I'm a purist. I like simplicity. I like to open up my wallet and see my positions and mark to market them at 4 o'clock. I don't need funky chicken.
[21:35]
Host
All right, Kevin, you are going to be with us at consensys next month, May 14th to 16th in Toronto. Give me a little preview as to what you're going to be talking about. I know you're doing a keynote and then you have a talk called Crypto's Next Chapter.
[21:49]
Kevin O'Leary
Yeah, a lot of people are asking me about the digitization of the North American economy and I'm bringing that to the table. I mean there's been so much change to how business is done, including crypto creeping into it. But it's more about why is the S&P 500 margins higher than pre pandemic? Why in private companies in North America, Canada and the United States have margins grown from 15 to 75%? What happened, what happened to the economy when you would have thought the pandemic would have wiped out so many of these business and it didn't happen. And so I'm going to walk through a bunch of case studies of companies, some within my own portfolio. Others these are not academic studies. These are real companies that, that maneuvered their way from a Nike through to a small, you know, 500 employee company through this remarkable four year period. And we are in a new place now. And you know, the direct consumer market is a multitrillion dollar business worldwide. All kinds of strategies have emerged and a lot of the digital payment systems are going to be a huge part of this. So I want to encompass all of that in my keynote. I mean I've really been working hard on this in such a, such an interesting time in terms of business and investing and I think that's a good way to approach the conference and I'm looking forward to it. I've always loved this one. This is such a cutting edge group of people. It's always a wonderful event.
[23:33]
Host
And crypto's next chapter, what do you think the driving narrative is going to be for it?
[23:39]
Kevin O'Leary
Regulation, Regulation, regulation. And finally people embracing that the era of the crypto cowboy is over. They're all in jail or, you know, we're all felons, whatever. I don't want crypto cowboy. I want to integrate crypto into the financial markets. So I can use them and they can be part of my portfolio on a regulated, compliant basis. The reason I want that is I know that trillions of dollars will follow me in once we solve for two things that it's regulated and it's okay with the regulator to own it and the infrastructure that provides the compliance is there. A lot of the exchanges still don't have the ability to mark to market the crypto portfolio directly into your own compliance department at 401. Even though crypto trades 24 7, you're obliged when you're managing a fund. Most funds have mandates like no more than 5% in any one position and no more than 20% in any one sector, as we talked about earlier. But you have to comply. There's a compliance officer that checks that every day at 401. So they don't like it if they can't check your crypto position, particularly if your crypto position is 19%. I've had to resolve that. I've had to figure out how to do that. And I'll get a call from compliance and saying, whoa, this physician here, this H bar went up from beach bar, had a huge move in the last couple of quarters and it went way offside. We had to trim back.
[25:10]
Host
Kevin, I want you to get your crystal ball out for me here. I know we're going to be speaking again at consensus, so I want you to make a few fun predictions for us. Who knows if they're going to come true. I know that you don't have any information that would give you kind of the upper side on making these predictions, but here we go. I want to have a little bit of fun. We talked about tariffs. I know consensus is less than 60 days away and you gave that 60 day marker. But what do you think is going to be happening with tariffs when we get to consensus on May 14?
[25:40]
Kevin O'Leary
I think the European deals will be well known and the terms will be known within 60 days, including Canada and Mexico on that. So I would say England, which is out of the eu, the eu, Switzerland out of the EU and the Asian countries that that will be resolved. I don't know if we will have inked a deal with China by then. That's still a question mark. So that still could be roiling the markets or providing volat utility. But 60 days is a long time when it comes to trade wars, so we'll see. I think there'll be more stability in 60 days in the market because two thirds of the war would be over, one third being China.
[26:20]
Host
What will the price of bitcoin be?
[26:24]
Kevin O'Leary
I think bitcoin will be closer to 100 than to 80 by consensus. I think it's on its mark. It's going to be marching back up. Whether it breaches 100, whether it goes through or not, I don't know. But I think it'll, you know, that that trading range, that's, that we've seen, you know, bitcoin kind of decoupled, as I said, in the last four trading sessions from the market, which is very positive sign because it's always been a risk on, risk off, and almost correlates the Nasdaq. But it's unlocking that correlation and that tends to have me think that will be more towards the 100k on Bitcoin.
[27:05]
Host
Will equities be in the red?
[27:09]
Kevin O'Leary
Yeah, probably still. I don't think you'll see the performance until China's resolved and the question mark of a recession and Fed hikes are all resolved. We're going to be at that really low. We're down about 14 and a half percent on the S and P right now and we're in a trading range. A thousand up, 1,000 down. I don't see that changing until you have these big question marks gone. That would be China, that would be a recession and that would be rate cuts. I don't see any rate cuts while the China squabble is on. And I certainly don't see rate cuts while Trump is abusing Powell. That's not going to happen. You can't browbeat the Fed. Just doesn't work. I mean, everybody tries. It just doesn't work. And the market wants an independent Fed anyways.
[27:55]
Host
Well, that leads me to my next question. We will have heard from the Fed on May 7th. Sounds like you're saying we're still going to be in a wait and see period.
[28:03]
Kevin O'Leary
Yeah, I think the probability of a 25 basis cuts zero. I really do. I mean, everybody's got a guess on it. But if I were the Fed, I wouldn't cut right here. I'd wait. I'd wait.
[28:16]
Host
And I think I know your answer to this last one. What is the dominant consensus narrative going to be?
[28:25]
Kevin O'Leary
I think it's going to be positive. You know that. I think consensus is far enough away that we'll be in a better tone than we are today. All the concerns you've raised and rightly raised, I think half of them, maybe more, will be resolved by consensus. And consensus will be focusing, as it always does, on the back end of the year. We also may have something very interesting by consensus approval of the Genius stablecoin Act that would be extremely positive for consensus because it would be right around that time that might get inked and you can imagine the buzz that that would bring to the conference.
[29:08]
Host
Well, it sounds like you're saying the narrative, the dominant narrative is going to be positive regulation and policy news.
[29:16]
Kevin O'Leary
Yeah. I mean, look, if you. In my view, it's my personal opinion, but if you get the stablecoin act inked, you want to own the exchanges.
[29:24]
Host
Kevin, it's always such a pleasure. We will see you in Toronto on May 14 and thanks for joining the show.
[29:30]
Kevin O'Leary
Take care. Thank you.
[29:31]
Host
And for everyone watching, if you would like to join us in Toronto and hear more from Kevin O'Leary, he will be giving a keynote like you just heard and a talk called Crypto's Next Chapter. You can join us from May 14th to the 16th. You can get your tickets at consensus2025coindesk.com and we'll see you there.

Summary5 min read

Markets Daily Crypto Roundup: Crypto Update | Game of Tariffs with Kevin O'Leary

Release Date: April 22, 2025
Host/Author: CoinDesk
Guest: Kevin O'Leary, Chairman of O'Leary Ventures

Introduction

In this episode of Markets Daily Crypto Roundup, host CoinDesk welcomes renowned investor and entrepreneur Kevin O'Leary to discuss the intricate dynamics between the U.S. and China amidst escalating economic tensions, and how these geopolitical factors intertwine with the evolving crypto markets. The conversation delves into tariffs, regulatory developments, the performance of major cryptocurrencies, and strategic investment insights for both seasoned and novice investors.

U.S.-China Trade War and Tariffs

Kevin O'Leary opens the discussion by addressing the severe impact of tariffs on international trade, emphasizing the strained relations between the U.S. and China:

"[00:32] Boats on the water coming from China, not coming into American ports because right now we're at 245% tariffs. That's a complete collapse of trade. And so it's got to get resolved. And it's a game of chicken between Xi and Trump."

He predicts a resolution within the next 60 days, viewing the current standoff as a high-stakes negotiation where both leaders are reluctant to yield. O'Leary underscores the broader implications of this trade war, including its potential to influence inflation and economic stability in the U.S.

Bitcoin’s Outperformance and Market Decoupling

Shifting focus to the crypto markets, Kevin elaborates on Bitcoin's recent performance relative to traditional tech benchmarks:

"[01:41] ... we've seen a decoupling which is very, very interesting."

He contrasts Bitcoin with gold, noting that while gold had traditionally been a safe haven during market volatility, Bitcoin is emerging as a significant alternative asset. This shift is partly attributed to impending regulatory frameworks, such as the bipartisan Genius Act (formerly the Stablecoin Act), which aims to legitimize digital payment systems backed by the U.S. dollar. O'Leary highlights the importance of clear regulatory definitions for cryptocurrencies, particularly distinguishing between commodities and securities, to foster broader institutional adoption.

Regulatory Landscape and Institutional Adoption

O'Leary delves deeper into the regulatory environment, emphasizing the necessity for structured compliance platforms within the financial sector:

"[03:25] ... the real granddaddy opportunity is to make crypto and the underlying compliance platforms work within the financial services industry in the US."

He advocates for the SEC and other regulators to cease litigation against crypto entities, aspiring to secure crypto's role as a productivity-enhancing platform. This regulatory clarity is seen as pivotal for reducing costs and increasing efficiency in commerce through digital assets.

Performance and Strategy for Ethereum

The conversation shifts to Ethereum (ETH), which has faced a significant downturn:

"[06:52] I want to get your perspective on ether. Right now it's down over 50% year to date..."

O'Leary discusses the transition to layer two solutions (L2s) like Polygon, critiquing Ethereum's efficiency and speed issues. He suggests that while ETH remains a standard, Bitcoin holds a more secure position for institutional investors due to its established presence and lower regulatory complexities. O'Leary personally maintains a minimal allocation to ETH, favoring direct Bitcoin exposure to capitalize on crypto volatility without the added complexities of Ethereum’s ecosystem.

Federal Reserve, Rate Cuts, and Economic Implications

Addressing broader economic concerns, O'Leary examines the Federal Reserve's stance on interest rates amidst the ongoing trade tensions:

"[10:41] ... it's classic that the executive, in this case Trump, would jawbone the Fed to drop rates."

He explains that Federal Reserve Chair Jerome Powell faces immense pressure to balance inflation targets with economic growth, especially under the strain of high tariffs. O'Leary warns against political interference in the Fed's independent mandate, stressing that any attempt to manipulate rate cuts for short-term political gains could destabilize long-term treasury markets and undermine the Fed's effectiveness.

Investment Strategies Amid Market Volatility

O'Leary offers strategic investment advice tailored to navigate current market corrections:

"[18:54] ... Never more than 5% in any one stock or bond. Never more than 20% in any one sector."

He advocates for diversification, maintaining strict sectoral and positional limits to mitigate risks. Highlighting his personal portfolio, O'Leary emphasizes the importance of balancing investments across traditional assets like gold and emerging ones like Bitcoin and crypto exchanges (e.g., Coinbase, Robinhood). He advises investors to take advantage of market corrections by strategically positioning their portfolios rather than reacting emotionally to volatility.

Upcoming Events and Future Outlook

Looking ahead, O'Leary previews his participation in the upcoming Consensus conference in Toronto:

"[21:35] ... a lot of people are asking me about the digitization of the North American economy and I'm bringing that to the table."

He plans to discuss the integration of crypto into mainstream financial systems, supported by regulatory advancements and technological innovations. In his talk, "Crypto's Next Chapter," O'Leary anticipates exploring case studies of businesses that have successfully navigated the post-pandemic economic landscape through digital transformation and digital payment systems.

Predictions and Closing Remarks

In a segment of light-hearted predictions, O'Leary speculates on the outcomes leading up to the Consensus conference:

Tariffs Resolution: He expects most European-related trade disputes to be resolved within 60 days, though the U.S.-China agreement remains uncertain.

"[25:40] I think the European deals will be well known and the terms will be known within 60 days... but that still could be roiling the markets or providing volatility utility."
Bitcoin Price Movement: Anticipates Bitcoin nearing $100,000, driven by its decoupling from traditional markets and increasing institutional interest.

"[26:24] I think bitcoin will be closer to 100 than to 80 by consensus... that tends to have me think that will be more towards the 100k on Bitcoin."
Equities Performance: Predicts continued weakness in the S&P 500 until major economic and geopolitical issues are resolved.

"[27:09] Yeah, probably still. I don't think you'll see the performance until China's resolved and the question mark of a recession and Fed hikes are all resolved."

O'Leary concludes by reaffirming his confidence in positive regulatory developments and the sustainable growth of crypto as a vital economic sector:

"[29:07] .. Regulation, Regulation, regulation. And finally people embracing that the era of the crypto cowboy is over."

He envisions a future where crypto is seamlessly integrated into regulated financial markets, offering stability and widespread adoption.

Conclusion

Kevin O'Leary's insights in this episode provide a comprehensive overview of the intersecting realms of international trade tensions and the evolving cryptocurrency landscape. His emphasis on regulatory clarity, strategic diversification, and the enduring strength of Bitcoin offers valuable guidance for investors navigating these turbulent times. As geopolitical and economic factors continue to shape market dynamics, O'Leary's perspectives underscore the importance of informed decision-making and adaptability in investment strategies.

Upcoming Appearance:
Kevin O'Leary will be a featured speaker at the Consensus conference in Toronto from May 14th to 16th. Attendees can hear his keynote and his session, "Crypto's Next Chapter," focusing on the digitization of the North American economy and the future of cryptocurrency in financial markets. Tickets are available at consensus2025coindesk.com.

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[00:00]
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[00:32]
Kevin O'Leary
Boats on the water coming from China, not coming into American ports because right now we're at 245% tariffs. That's a complete collapse of trade. And so it's got to get resolved. And it's a game of chicken between Xi and Trump. I think it'll get resolved in the next 60 days, but I'm guessing like everybody else and Powell's in the same boat. So it's classic that the executive, in this case Trump, would jawbone the Fed to drop rates. That's been going on since the beginning of time.
[01:05]
Host
Trump versus Chi, Bitcoin versus traditional markets and can either make a comeback.
[01:11]
Advertiser
Mr.
[01:11]
Host
Wonderful says that China and the US are playing a game of chicken. Bitcoin shows promise against traditional markets. And the narrative around layer twos is much more exciting than Eth these days. O'Leary Ventures chairman Kevin O'Leary, welcome back to Markets Daily.
[01:27]
Kevin O'Leary
Great to be here. Thank you.
[01:29]
Host
All right, let's talk about crypto markets off the top, and then I want to broaden the conversation out a bit. You know, if we look at bitcoin this morning, it is continuing to outperform traditional tech benchmarks. Talk to me about what this signals for you.
[01:42]
Kevin O'Leary
Well, this is a recent development. As you know, gold was outperforming bitcoin for quite a while during this incredibly volatile period in equity and debt markets. And now it seems to have latched on to be an alternative where it was really a risk on, risk off for quite a while. No different than just the indexes, the stock indexes. And so we've seen a decoupling which is very, very interesting. I think a lot of this has to do with where we're at in the regulatory cycle regarding all of crypto. As you well know, there is a bipartisan bill, the Stablecoin act, now called the Genius act under Hagerty, that looks like it has broad support towards digital payment systems. Basically a Stablecoin backed by the US Dollar, which is itself not a risk asset. However, it is a March forward in finally regulating crypto. And everybody's figured out we want this regulation because we would like to get to the point where we get through this first stablecoin act and then we get to the Market Infrastructure act, which finally determines which tokens and securities that are crypto are commodities and which are securities. Which would be a great outcome because once you have that designation, you know which regulator you're dealing with. And the tone has changed in Washington. Everybody's been talking about this. One of the reasons that we see more interest in bitcoin, period. But the real granddaddy opportunity is to make crypto and the underlying compliance platforms work within the financial services industry in the US and get the SEC and other regulators to stop litigating everybody. We're not there yet. We're pretty close. And that would, that would secure crypto as a, as a productivity platform, if you want to think of it that way. I think the usefulness of crypto is how it can reduce costs and add productivity to commerce, whether it's a stablecoin or whether it's a Bitcoin for risk on, risk off. So all of the tone is better and I think the market's reflecting that. But in the last week, seeing, you know, bitcoin specifically outperform the indexes, a lot of people are waking up and looking at that, saying, wow, this, this is a long time since this occurred.
[04:03]
Host
Break that down for me even further because I think a lot of people look at the maturity, I guess the path to maturity of bitcoin, they look at the path to regulation in the United States and they think, you know, with more regulation, with more mainstream adoption, that should mean that Bitcoin is more correlated with traditional markets. But you know, you just mentioned that decoupling, so break that down even further for me.
[04:27]
Kevin O'Leary
Well, I'm not sure I agree with that. And I'll tell you why. If you look at allocations traditionally in hedge, pension and sovereign wealth, it's not uncommon to find up to 5% weighting in an alternative asset like gold, which has outperformed everything in the last few months. It's been a, a harbor of security stabilization and you know, well past old highs after post inflation rate applied to it. So what percentage of those institutions? Because look, I appreciate that retail investors like to get involved and many of them use ETFs for Bitcoin, but the real money is managed in sovereign pension, you know, and high net worth family office around the world. And they have really not yet allocated 3 to 5% weighting in Bitcoin, some of them have, but it's nowhere near as mature as gold and gold has proven itself again. I have a 5% weighting in gold. Half of it's fully and I pay for storage. Half I round out in and out on the GLD. Or you can use other ETFs that are even less expensive, maybe not as liquid, but that's a classic institutional play. And this year it's worked. And it's worked very, very well. And I think people are waking up. When you say break it down. I now allocate bitcoin. I'm not 5%, but I'm 1 1/2 percent. So I'm on my way to a 3% weighting total crypto securities. If I look at everything I've got, including investments in the exchanges, which I consider the picks and shuffles, I'm at 19%, so I'm right up there. 20% weighting is not uncommon for sectoral weighting. And So I own WonderFi up in Canada, Coinbase in the US. You know, these are kind of Robin Hood. I consider that to be moving into a crypto that. I own that as well. These are the infrastructure plays. And the reason you would do that is if you really believe the, the Genius act, the stablecoin act is going to pass. You're going to create this FX market where you can actually transfer and digital payments at a fraction of the cost of Fed wire or traditional bank wire. I mean, this is a massive opportunity and I don't think the market's woken up to that yet. So I'm playing both the actual tokens and I'm playing the infrastructure through the exchanges.
[06:53]
Host
I want to get your perspective on ether. Right now it's down over 50% year to date, and we're talking about, you know, stablecoins and infrastructure play. And in that conversation, for a long time, ETH was a dominant player. Talk to me about how you're looking at ETH and Ethereum and how you expect to see price performance in the short term here.
[07:15]
Kevin O'Leary
Well, there's no question there's a move to the L2s, Solana onward and, and, you know, if you want to talk about efficiency, ETH is not the most efficient or the fastest. Now you've got players like Polygon on top of it, and there's a lot of, a lot going on. It is still the standard. But when I think about portfolio managers and we talk all the time, here's something really you got to think about. If you're just going into the crypto the first time. And you're just saying, okay, I want to allocate 1% in my $2 billion fund. That's not uncommon. They don't go to ETH. The only two assets they go to is USVC. I mean, or a stablecoin for liquidity for a bunch of reasons. And I use usdc. I have to full transparency. I'm a shareholder circle. So I like the fact that it's domestic and it's, it's auditable and I think it's going to survive at one to one audit and all that. But it's bitcoin. I mean, if you want exposure to crypto volatility, it's bitcoin. I mean it's sort of, it's not. ETH is not the go to place unless you start to understand the utility of it. And then you start to ask yourself, well, why am I only in eth? Why am I on L2s? Like why am I just doing eth? So I think for the billions that are waiting to come into crypto, it's not going to be eth, it's going to be Bitcoin itself. And you know, frankly there's a lot of people that say I don't need anything else. I just need, if I want exposure to crypto volatility, I'll just buy bitcoin. And they haven't been wrong.
[08:59]
Host
It's still though the second largest crypto by market cap. Do you think that it could be dethroned in the near future?
[09:08]
Kevin O'Leary
I think it'll be very hard to dethrone it, but I certainly don't. Only I own it too. But it's not the only one I own. I mean, I look at all the innovation coming and a lot of people don't understand innovation at the L2 level, but blockchain really matters. But speed of efficiency, I mean, my goodness, ETH is slow. I'm sorry, but it's slow. And I think a lot of people know that. And more transactions get piled on it. It doesn't get any better. I'm not there for a full weighting on eth. It's a one percenter for me. So I'm just one guy. I mean, look, I have no problem with it. It's just that's not going to be a 5% waiting ever error for me because there's so much innovation around it, on top of it, away from it. That's not a good sign. You don't see that kind of momentum on bitcoin. Bitcoin is the granddaddy anchor of any crypto portfolio. It just is. And it's not going to change. And it's the way it is. You know, sometimes you have to realize as these asset classes mature, there's always the granddaddy. Well, bitcoin's a granddaddy.
[10:14]
Host
I want to zoom out now. We have a lot to talk about. We have rates, we have China, we have tariffs, we have a lot going on. And I want to start with the potential for rate cuts. So as we know, the Fed hasn't cut rates yet while the ECB has cut, I think for the seventh time in a row. I recently had our markets editor from CoinDesk on this show and he said that someone is making an error and we're just going to have to wait and see who it is. What are your thoughts here?
[10:41]
Kevin O'Leary
Well, you know, here's the Powell's in a head squeezer as chair of the Fed right now because his mandate is 2% inflation and full employment. Doing well on the employment side, not so well on the inflation side. And so he's looking at one factor right now. He's saying, how long is this China dance going to go for? I mean, the rest of the whole thing with tariffs is going to get resolved with the eu. Britain, Switzerland, Thailand, Canada, Mexico. They're all coming to the table with either a reciprocal idea, maybe 10% or a zero tariff for free trade, one of those two alternatives. But China's a different beast. This is an all out economic war between the US And China. And it's not just tariffs. The question about IP theft has come up. You saw the list of Trump's grievances. IP theft was on there. And there's a big problem that China has been stealing IP for 20 years. Getting compliant with the World Trade Organization. They joined in 2000. They have never once been compliant, not a single week. There's thousands of complaints unresolved. No access to their court systems to litigate trade disputes, yet they have full access to the US Capital markets. Huge problem there because there's so many Chinese companies listed on Nasdaq and the New York Stock Exchange that are not compliant with gaap. They were given three years to get compliant. They didn't abide by any of it. They totally ignored it. And now there's a new sheriff in town just put in place. Paul Atkins is the new SEC head and he said, look, I'm going to enforce these laws, I'm going to delist these Chinese companies. They said they were going to get compliant. And they didn't. The former SEC Gensler didn't actually implement those laws or at least make Chinese companies be compliant with them. This new sheriff, if you want to call them that, is going to, and I think all of these things are, have, have to be resolved with China. And so if your pal, you're watching this passion play play out and saying, I'm not going to drop rates, I don't know what inflation is going to be like if the China thing actually happens. It could really, really be inflationary because the US market is the largest consumer market on earth, almost 40%. And all that stuff on boats, on the water coming from China, not coming into American ports, because right now we're at 245% tariffs. That's a complete collapse of trade. And so that's got to get resolved. And it's a game of chicken between Xi and Trump. I think it'll get resolved in the next 60 days. But I'm guessing like everybody else and Powell's in the same boat. So it's classic that the executive, in this case Trump, would jawbone the Fed to drop rates. That's been going on since the beginning of time. The Fed's independent. The market wants the Fed to be independent. Powell's done a pretty good job. He's not going to be browbeaten by anybody. No one's going to tell him when to lower rates. That's what his mandate is. He decides with the data that comes in. And I don't think Trump's going to fire him either. It's a bad sign to the bond market to fire the Fed and replace it with somebody that's compliant with your wishes. The market's not going to like that. That's not going to be good for the stability of long term treasury debt in the United States.
[13:59]
Host
Talk about that a little bit more. I know you say that Trump and Chi are playing a game of chicken or we're in a cat and mouse situation here. You said that you think it's going to go on for 60 days. What happens from here? What do you think? How does this play out?
[14:12]
Kevin O'Leary
Well, you got to find the off ramp where both sides save face. And so for Qi, he wants to keep all his factory workers employed, otherwise he has riots in the streets. And for Trump, he doesn't want to see hyperinflation in the US if these goods and services can't be purchased at low prices by American consumers. And so what he's trying to do is clean up and a lot of people including me, advocate for this. Because for 20 years, China has just not played by the rules. And the funny thing is, they don't give a damn. They don't care. And so, because there's no consequence, there's never been a consequence. And this administration comes along and, you know, I always say this about Trump. Half the market has Trump derangement syndrome. They just go crazy with the fact that he's back in White House. They can't stand it. And I say, look, I don't get caught up in the noise. I focus on the signal. I'm a policy guy. I just care about policy. And so I don't shill for Trump. I don't shill for any politician. I shill for policy. From policy perspective, I'd like to see this China issue resolved because I, too, have been ripped off. My IP has been ripped off in China. So many of the investments I've made in companies there get to $5 million in the trajectory of their new product or service in US Domestic markets, and then you find out the Chinese have ripped them off and selling it back into the US at a 40% disc discount because they don't have to recover any of the IP costs. They don't. They never invested in rmd, so they just rip the product off. And that's happened countless times. And for one, I'm tired of it, and I'd like to see it resolved. And I think many other countries as well that have had this happen to them would like to see it resolved as well. And so maybe for the cost of some volatility, VIX is up high. I get it. But if this thing could be resolved, and, you know, it has to be before the midterms, Trump can't go into the midterms with this kind of volatility or he'll lose, likely lose his majority mandate. So he doesn't want that to happen. And she can't afford two years of factory workers not making anything. So it's an interesting situation.
[16:10]
Host
So I guess, you know, with both parties at the table playing this game of cat and mouse, who. Who gives in? What's the negotiation tactic here? Because like you said, this has been going on for a very long time. I know you've proposed a 400% tariff to kind of get things to a standstill so this negotiation can happen. But. But where does the concession come from here?
[16:34]
Kevin O'Leary
Well, you know, the way you can assume right now between the two countries is a backdoor dialogue going on. And I would, and I think many people believe that to be the case. They're just trying to figure out who blinks first and you don't. In the case of xi, he's got to look strong to his people and so does Trump. So you don't know how it happens the way policy seems to happen with Trump. A lot of it happens on aircraft. On Sundays when he's flying back up on Air Force One to Washington, he comes out and starts talking to reporters. I've noticed that it's becoming a trend. He kind of goes to Mar a Lago for Thursday, Friday, Saturday, and flies up Sunday back to Washington and all of a sudden you get policy. It could be on one of those trips or it could be that she announces he's going to meet Trump in Riyadh or Geneva or something. You know, it's that kind of thing that's going to happen and I'm not too worried about it. The market doesn't seem to care that much about the European negotiations, Canada or Mexico anymore. Canadians have an election that's going to be resolved on the 28th and they'll be back at the bargaining table after that. So all of this stuff is going to get resolved. People don't like volatility. And then you've got all the pun, you know, the pundits saying, oh, recession chances 50%. They were calling for recession for four years and we haven't had it yet. So, you know, I'm just in a wait and see mode. And by the way, the market's correct all the time, 20% S&P down 14, 15% right now. So you've gone from sort of like a 23 P to 17 and not a bad place to put some money to work. I've been doing a little nibbling myself. You know, there's a lot of gnashing of teeth and angst, but corrections happen all the time and they happen for different reasons. You want to blame the tariffs, you want to blame job owning the Fed, blame whoever you want, but take advantage of a correction. It's always traditionally been a good place to enter and put some dollars to work in the indexes, and I've done that. And of course, having some bitcoin and gold has not been a bad outcome either. And so there's always something working somewhere in a market with volatility and you have to focus on that too.
[18:39]
Host
For someone who would maybe come up to you at an event or maybe even one of your kids, I'm sure that it wouldn't be their first time investing. But for first time investors out there who want to take advantage of the correction. Where would you tell them to look?
[18:54]
Kevin O'Leary
Well, I have a very simple rule that's worked for me for decades. Never more than 5% in any one stock or bond. Never more than 20% in any one sector. So we have 11 sectors. Technology, energy, you know, that kind of thing in the, in the US economy. So I make sure that my sectoral weightings remain below 20% and any position, including alternatives like bitcoin and like gold, I max out at 5%. And that's really worked for me. So you have this, you know, I remember I bought Tesla before it split and the thing just kept becoming 6, 8, 9% percent of the portfolios and I kept trimming it back down to 5% and eventually my cost base was zero. Now I own Tesla with a zero cost base and it's volatile, but that's the kind of thing you have to do in maintaining diversification in the portfolio. But I definitely think owning some bitcoin, and for me, I love USDC because the yield on that this morning I think is 3.822, which is better than a savings account in a bank. So I have a bunch of USDC sitting on exchanges getting yield. There's so many different ways to play it, but you do have to manage it through diversification. That's the key. And I consider crypto will be the 12th sector of the economy within five years because of the, of the productivity it has for digital payment systems and storage of wealth. So, you know, I've been maintaining my kind of cryptos. I mentioned earlier the 19% weighting, including the exchanges. So, you know, owning Robinhood, owning Coinbase, owning Wonderfi, these are the big North American exchanges where you, no matter what crypto is doing up or down, the exchange is making money because it's the infrastructure, volatility is good for an exchange. So I own all three of us.
[20:40]
Host
I mean, you mentioned a bunch of crypto equities there. What are your thoughts on MicroStrategy?
[20:45]
Kevin O'Leary
I don't own MicroStrategy. I think, you know, he's a great strategist, there's no question about it. But why don't I just only own bitcoin outright, which is what I do? I don't need to lever it. I don't buy the etf. I never understood why anybody would buy bitcoin in an ETF and pay fees. That's insane. I'm not telling people what to do, but I would never do that. If I want Vol on crypto. Just buy bitcoin. You don't have to have a funky chicken strategy over it or debt on it or leverage or prefs or bonds. Just own bitcoin. That's how I, I'm a purist. I like simplicity. I like to open up my wallet and see my positions and mark to market them at 4 o'clock. I don't need funky chicken.
[21:35]
Host
All right, Kevin, you are going to be with us at consensys next month, May 14th to 16th in Toronto. Give me a little preview as to what you're going to be talking about. I know you're doing a keynote and then you have a talk called Crypto's Next Chapter.
[21:49]
Kevin O'Leary
Yeah, a lot of people are asking me about the digitization of the North American economy and I'm bringing that to the table. I mean there's been so much change to how business is done, including crypto creeping into it. But it's more about why is the S&P 500 margins higher than pre pandemic? Why in private companies in North America, Canada and the United States have margins grown from 15 to 75%? What happened, what happened to the economy when you would have thought the pandemic would have wiped out so many of these business and it didn't happen. And so I'm going to walk through a bunch of case studies of companies, some within my own portfolio. Others these are not academic studies. These are real companies that, that maneuvered their way from a Nike through to a small, you know, 500 employee company through this remarkable four year period. And we are in a new place now. And you know, the direct consumer market is a multitrillion dollar business worldwide. All kinds of strategies have emerged and a lot of the digital payment systems are going to be a huge part of this. So I want to encompass all of that in my keynote. I mean I've really been working hard on this in such a, such an interesting time in terms of business and investing and I think that's a good way to approach the conference and I'm looking forward to it. I've always loved this one. This is such a cutting edge group of people. It's always a wonderful event.
[23:33]
Host
And crypto's next chapter, what do you think the driving narrative is going to be for it?
[23:39]
Kevin O'Leary
Regulation, Regulation, regulation. And finally people embracing that the era of the crypto cowboy is over. They're all in jail or, you know, we're all felons, whatever. I don't want crypto cowboy. I want to integrate crypto into the financial markets. So I can use them and they can be part of my portfolio on a regulated, compliant basis. The reason I want that is I know that trillions of dollars will follow me in once we solve for two things that it's regulated and it's okay with the regulator to own it and the infrastructure that provides the compliance is there. A lot of the exchanges still don't have the ability to mark to market the crypto portfolio directly into your own compliance department at 401. Even though crypto trades 24 7, you're obliged when you're managing a fund. Most funds have mandates like no more than 5% in any one position and no more than 20% in any one sector, as we talked about earlier. But you have to comply. There's a compliance officer that checks that every day at 401. So they don't like it if they can't check your crypto position, particularly if your crypto position is 19%. I've had to resolve that. I've had to figure out how to do that. And I'll get a call from compliance and saying, whoa, this physician here, this H bar went up from beach bar, had a huge move in the last couple of quarters and it went way offside. We had to trim back.
[25:10]
Host
Kevin, I want you to get your crystal ball out for me here. I know we're going to be speaking again at consensus, so I want you to make a few fun predictions for us. Who knows if they're going to come true. I know that you don't have any information that would give you kind of the upper side on making these predictions, but here we go. I want to have a little bit of fun. We talked about tariffs. I know consensus is less than 60 days away and you gave that 60 day marker. But what do you think is going to be happening with tariffs when we get to consensus on May 14?
[25:40]
Kevin O'Leary
I think the European deals will be well known and the terms will be known within 60 days, including Canada and Mexico on that. So I would say England, which is out of the eu, the eu, Switzerland out of the EU and the Asian countries that that will be resolved. I don't know if we will have inked a deal with China by then. That's still a question mark. So that still could be roiling the markets or providing volat utility. But 60 days is a long time when it comes to trade wars, so we'll see. I think there'll be more stability in 60 days in the market because two thirds of the war would be over, one third being China.
[26:20]
Host
What will the price of bitcoin be?
[26:24]
Kevin O'Leary
I think bitcoin will be closer to 100 than to 80 by consensus. I think it's on its mark. It's going to be marching back up. Whether it breaches 100, whether it goes through or not, I don't know. But I think it'll, you know, that that trading range, that's, that we've seen, you know, bitcoin kind of decoupled, as I said, in the last four trading sessions from the market, which is very positive sign because it's always been a risk on, risk off, and almost correlates the Nasdaq. But it's unlocking that correlation and that tends to have me think that will be more towards the 100k on Bitcoin.
[27:05]
Host
Will equities be in the red?
[27:09]
Kevin O'Leary
Yeah, probably still. I don't think you'll see the performance until China's resolved and the question mark of a recession and Fed hikes are all resolved. We're going to be at that really low. We're down about 14 and a half percent on the S and P right now and we're in a trading range. A thousand up, 1,000 down. I don't see that changing until you have these big question marks gone. That would be China, that would be a recession and that would be rate cuts. I don't see any rate cuts while the China squabble is on. And I certainly don't see rate cuts while Trump is abusing Powell. That's not going to happen. You can't browbeat the Fed. Just doesn't work. I mean, everybody tries. It just doesn't work. And the market wants an independent Fed anyways.
[27:55]
Host
Well, that leads me to my next question. We will have heard from the Fed on May 7th. Sounds like you're saying we're still going to be in a wait and see period.
[28:03]
Kevin O'Leary
Yeah, I think the probability of a 25 basis cuts zero. I really do. I mean, everybody's got a guess on it. But if I were the Fed, I wouldn't cut right here. I'd wait. I'd wait.
[28:16]
Host
And I think I know your answer to this last one. What is the dominant consensus narrative going to be?
[28:25]
Kevin O'Leary
I think it's going to be positive. You know that. I think consensus is far enough away that we'll be in a better tone than we are today. All the concerns you've raised and rightly raised, I think half of them, maybe more, will be resolved by consensus. And consensus will be focusing, as it always does, on the back end of the year. We also may have something very interesting by consensus approval of the Genius stablecoin Act that would be extremely positive for consensus because it would be right around that time that might get inked and you can imagine the buzz that that would bring to the conference.
[29:08]
Host
Well, it sounds like you're saying the narrative, the dominant narrative is going to be positive regulation and policy news.
[29:16]
Kevin O'Leary
Yeah. I mean, look, if you. In my view, it's my personal opinion, but if you get the stablecoin act inked, you want to own the exchanges.
[29:24]
Host
Kevin, it's always such a pleasure. We will see you in Toronto on May 14 and thanks for joining the show.
[29:30]
Kevin O'Leary
Take care. Thank you.
[29:31]
Host
And for everyone watching, if you would like to join us in Toronto and hear more from Kevin O'Leary, he will be giving a keynote like you just heard and a talk called Crypto's Next Chapter. You can join us from May 14th to the 16th. You can get your tickets at consensus2025coindesk.com and we'll see you there.